ARE YOU A “HIGH RISK CUSTOMER”?: Why Recent FTC Consent Order Makes it Trickier Than Ever for Telemarketers To Find Carrier Partners

5 Comments

So I was re-reviewing that big X-Cast consent order from the FTC last year.

You might recall voice over Internet Protocol (VoIP) provider XCast Labs, Inc., agreed to settle Federal Trade Commission charges by paying $10MM and agreeing to a bunch of other tight terms and restrictions.

I was initially most interested in the requirement that XCast agreed to immediately TERMINATE any customer that engaged in telemarketing without its own individual  Subscription Account Number (SAN) for accessing the National Do Not Call Registry. A lot of folks out there fail to obtain their own SAN and work with services that permit scrubbing without a SAN which is really not allowed in my view (or the FTCs).

But as I re-worked through the order I was reminded of this phrase “High-Risk Customer.”

In the order X-Cast agree to be particularly watchful over “High-Risk Customers” and terminate their service anytime such a customer:

  • “pays for services by any means other than (a) a bank transfer from a financial institution domiciled in the United States or (b) a credit card”; or
  • the High-Risk Customer has been the subject of, a total of three (3) or more federal or state government agency subpoenas or civil investigative demands
    issued to or otherwise shared with Defendant; or
  • Three or more ITG traceback tickets.

So these are pretty good standards for carriers to keep in mind– if you receive three tickets or three subpoenas regarding a single company it might be time to turn off the spiggot (in addition to terminating any marketer that doesn’t have their own SAN).

But who are high-risk customers?

Per the FTC they include “any Customer that engages in Telemarketing or any Person domiciled outside of the United States.”

Ta da.

So if you’re a telemarketer you are “high risk” in the eyes of the FTC. And, of course, anyone overseas is also high risk which… I think I am ok with.

Obviously I don’t love the idea that anyone who is a marketer is instantly high risk in the eyes of a federal regulator, but… what else is new.

Again carriers really ought to be paying attention to this. We’re here to help if needed.

Also did you know Queenie is going to be speaking at in Miami at the MEF Leadership Forum?

 

I’ll be she will have a bunch more tips and tricks for carriers.

Chat soon!

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Published by Eric "Czar" Troutman

The Czar of TCPAWorld Eric Troutman is one of the country’s prominent class action defense lawyers and is nationally recognized in Telephone Consumer Protection Act (TCPA) litigation and compliance. He has served as lead defense counsel in more than 70 national TCPA class actions and has litigated nearly a thousand individual TCPA cases in his role as national strategic litigation counsel for major banks and finance companies. He also helps industry participants build TCPA-compliant processes, policies, and systems. Eric has built a national litigation practice based upon deep experience, rigorous analysis and extraordinary responsiveness. Eric and his team feel equally at home litigating multibillion dollar telecommunications class actions in federal court as they do developing and executing national litigation strategies for institutions facing an onslaught of individual TCPA matters. They thrive in each of these roles – delivering consistently excellent results – while never losing sight of the client experience. While many firms now tout TCPA expertise, Eric has been there from the beginning. He built one of the country’s first TCPA-only defense teams and began serving as national TCPA counsel for his clients nearly a decade ago. This perspective allows him to swiftly develop the right litigation strategies for dealing with recurring problems, without wasting time on tactics that are bound to fail. Eric’s rich historical perspective and encyclopedic knowledge of the TCPA landscape also make him an invaluable resource to institutional compliance teams struggling to comply with the shifting regulatory landscape. No task is too small – or too big. Indeed, Eric and his team have helped build TCPA-compliant systems and processes for some of the largest and most complex corporate entities in the country. He commonly works with in-house compliance counsel to build and implement enterprise and business-line specific TCPA solutions, performs TCPA audits and drafts and reviews proposed TCPA policies and procedures. He and his team also have the technical expertise necessary to assist call centers seeking to develop TCPA-resistant call path architecture or to modify existing telephony and software integration to better insulate from potential TCPA exposure. Eric has built a reputation for thought leadership. An avid blogger and speaker, he has been at the forefront of the industry’s effort to push for clarity and a return to sanity for the TCPA for years. He was selected to advocate for the financial services industry on important TCPA issues before the Federal Communications Commission and co-authored the nation’s only comprehensive practice guide on TCPA defense. In his spare time, Eric leads defense teams representing banks and other financial services companies in consumer finance litigation matters. He has experience representing clients in UCC, TILA, RESPA FCRA, CCRA, CLRA, FDCPA, RFDCPA and FCCPA claims, as well as in fraud and bank operations issues.

5 Comments

  1. Czar, you make a GREAT point that many telemarketers fail to get their own Subscription Account Number (SAN) and obtain their DNC list from the FTC. Many just do not bother at all, and believe that it is up to the consumer to make a one-on-one do not call demand. (“Oops, Mr./Ms. Consumer, we dialed your number by mistake; we get one freebie; but if you don’t tell us, you are fair game.”) Others “scrub” their call lists through third-party vendors, such as TCPA Litigator List and Blacklist dot com, but those folks are NOT compliant with the FCC [47 CFR 64.1200(c)(2)(i)(D)] or FTC [16 CFR 310.4(b)(3)(iv)] requirement that they obtain the list from the FTC. And, I am amazed by how many TCPA defense attorneys are actually oblivious to this requirement. (Especially, the “big law” firms. It seems like the “bigger” they are; the more oblivious.) But, alas, YOU, Czar, are right on top of your game on this one and I tip my hat to you for being so. Hopefully, some folks will read your words and take them to heart. Do you think that R.E.A.C.H. might adopt, as part of its standards, a requirement to screen leads against the NDNC database?

    Reply

    1. Well put Mr. Dobronski, I too agree The Czar does have his moments. Your suggestion of R.E.A.C.H. adopting a requirement to screen against the NDNC is excellent!

      Now while one might hope this is already being done, if it’s not I hope it will be (it really does seem to be a no-brainer).

      While we’re talking about standards for R.E.A.C.H. members to meet, I’d like to suggest that (when applicable) they must show proof of being registered Telephonic Sellers in the states that do require it.

      For example here in CA, per the CA DOJ AGs office there are less than 100 registrants (meaning to call out from CA or call into CA) 97 to be exact. http://www.ossh.com/consumers/general/telreg.htm

      I mean if one cannot legally solicit into or from a particular state how/why would we expect them to meet the otherwise high standards to be R.E.A.C.H. caliber members?? Eric?

      NOTE: I raised this issue during the NPRM for docket #’s 21-402 & 02-278 back on June 6, 2023 in my response to a R.E.A.C.H. May 9, 2023 comment, but it seemed to fall on deaf ears: https://www.fcc.gov/ecfs/document/10607056516221/1

      Reply

  2. “A lot of folks out there fail to obtain their own SAN and work with services that permit scrubbing without a SAN which is really not allowed in my view (or the FTCs).”
    In fact those with SAN numbers has been decreasing every year since 2019: From a total of 15,080 (2019) down to only 10,347 (2023) that’s HUGE!!
    While the number of registered DNC numbers continues to increase yearly from 239.4 million (2019) up to 249.5 Million (2023)!!
    Per FTC data Book 2023 – page 5: https://www.ftc.gov/system/files/ftc_gov/pdf/Do-Not-Call-Data-Book-2023.pdf
    What’s wrong with this picture??
    So are we to believe the multitude of third party orgs (Blacklist Alliance, DNC.com, TCPA litigator list, ect) have not only registered as SANs themselves (most likely) but are ONLY offering services to others that have their own SAN, per FTC regulations (highly unlikely)?
    Hmmm…

    Reply

    1. Jim, the FCC and FTC regulations clearly state that the telemarketer must obtain their DNC list directly from the administrator (FTC), not via a third party. So, those that utilize the third party are in violation of both the TCPA and TSR.

      Reply

      1. Mark, I appreciate the clarification, thank you. We need to shut down that practice one way or another…

        Now this is starting to make sense as to what I’ve been personally experiencing for some time now (at least a year). I’ll get a call, get screened, often by heavily accented folks, then instead of getting transferred to the next agent, I’ll either get disconnected, hung up on, sent to a non-functional VM box, a fast busy, or such dead ends.

        I know folks that have even gotten a recording “this call is blocked by the Blacklist Alliance” The best I can figure is that rather then scrub before calling they are using these third-party vendors you mentioned and scrubbing once they ‘have a live one’

        The end result being still getting the calls, however there is no easy no way to identify the culprit to confront them – very frustrating to say the least 😦

        Thanks Eric for facilitating our discussion 😉

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